In what “could herald a new era in auto insurance” (if the Wall Street Journal is right), Progressive “introduced a new type of car insurance that offers a discount to policyholders based on real-time information about how and when they drive.”

And how will Progressive obtain all that info? You guessed it, with a gizmo. Plugged into the OBD system, Snapshot “keeps track of your good driving habits,” as the particularly obnoxious Flo commercial promises. “In fact, Snapshot cares only about a few small things. Like how hard you brake, when you are on the road, the miles you drive.”

So what about bad driving habits? “Other stuff like how fast you drive or where you drive – it just doesn’t care about that,” promises Flo with the combined credence of Benedict Arnold, Pinocchio and Bernie Madoff.

Actually, “The only thing it cares about is saving you money.”

Ok, let’s add Richard Nixon.

The gizmo is part of Progressive’s “Pay As You Drive®” (yep, they trademarked that) program. It should be renamed to “Save While You Stop™”. Progressive offers snap-shot drivers discounts of up to 30 percent, if they brake gently, if they don’t drive during rush hour, and if they stay at home between midnight and 4am.

Basically, the less you drive, the more you save. Most likely you will achieve the full 30 percent savings when you don’t drive at all. Say hello to your car’s ankle bracelet. Oh, Progressive says the gizmo does not contain a GPS and won’t know how fast you go where. (Maybe speed does not kill. Or that feature is left for Snapshot 2.0)

“Other insurers—most notably Allstate Corp.—are working hard to catch up with their own usage-based insurance offerings,” threatens the Journal.

Progressive meanwhile is working on the next-gen Snapshot. Progressive Chief Executive Glenn Renwick told the Journal that in a few years, the gizmo will be obsolete. The data would be gathered from a customer’s cellphone instead.

In the meantime, let’s hope Progressive keeps the insufferable Flo commercials. They might be the biggest barrier to entry.

The assumption is that Progressive will only take the money they need to take based on your particular driving style. It is an assumption based on a similar Progressive idea that says that a government will only take the money it needs based on your particular needs. We all know how that really turns out and I don’t expect it will work all that differently with this auto insurance company.

Progressive? Nah. Only in Orwell’s 1984 could that be considered progressive.

Why doesn’t Progressive set up a program where they use your kids to turn you in whenever you break the law? I think thats be tried in a few other countries with some dramatic results, right?

I thought insurance was usage based anyway. They ask you how many miles you drive, where’s work etc.. Gimmick gimmick gimmick.. that along with all of the stupid discounts for everything including the “discount for getting a discount”.. Insurance commercials are on par with infomercials. Annoying as hell.

Progessive seems to have done away with the miles-you-drive-discount in Florida. I just added a 3rd car to my policy last week and so I asked how much I’d would now be saving based on the fact that we were dividing our yearly mile totals by 3 instead of 2. Their answer: no savings at all. The didn’t care about how many miles I drove, but did have a “recreational” option. The rep I spoke with said putting a vehicle in that category does not effect your rate at all. This doesn’t make sense to me, but the rep confirmed: no savings for weekend driving only.

That would be an amusing little project. It’ll have to plug in to the car’s actual OBD port to keep the reported distance in sync with the car’s odometer. Then all it has to do is time-shift travel to off-peak hours, smooth out acceleration and deceleration, and stay roughly within the state’s maximum speed limit. Oh, and not leave detectable statistical traces.
Implementation is left as an exercise for the reader.

This is just what I was thinking. It almost feels like this might discourage evasive manuevers in an emergency, or evasive manuevers to prevent an emergency. Perhaps I’m not putting this together in my head correctly.

Wow, this is a terrific idea! Build liability insurance premium into gas taxes and create a state insurance pool to handle administration and claim adjudication. That would a) spread the risk and b) avoid expensive insurance company administration and profit. It would also automatically ensure that out of state drivers pay their fair share.

As far as Snapshot device, it HAS to propagate to other P&C carriers. Anyone familiar with how insurance works will tell you that. This is due to something called adverse selection.

Full coverage with what limits? This is the nut no one wants t o crack when discussing insurance rates.

I could have full coverage from State Farm (my insurer for the last twenty six years) for about $350.00 a year, or a little less that thirty dollars a month.

But with my current policy limits for uninsured/under-insured, medical, low deductible and other things, the cost of my policy is about $840.00 a year. So comparing this figure to what someone else pays is useless without their policy particulars.

I too am with State Farm, for 10 years now. 250/250/750K liability (and un/underinsured coverage as the same), $50K medical. $500 deductible collision (which I should probably up to $1000), $100 deductible comprehensive. Obviously with less liability insurance mine would be cheaper too, Comp and Collision are slightly more than 1/2 the total. If I drove a clapped out Panther with just liability coverage I would save a bundle. My new BMW will be slightly more than the Saab once I take delivery, IIRC +$100 per year, with all the difference in collision and comp. I no longer get a multi-car discount, as my other 4 cars are on Hagerty Collector car policies. Those are ~$100/yr each, lower liability limits. The multi-car discount would save me 20% if I still had it. I do get a discount for having home owners with them too.

Other places are cheaper, but compared to say, MA where my co-workers pay 2X as much for base model Corollas, I can’t complain.

I’m actually curious about the Progressive deal – I am kind of an ideal candidate in that I don’t commute, I generally don’t drive in the middle of the night, and I am a fairly mild, if unobtrusively rapid, driver. My mileage piles up on long trips for work and vacation. Not much local running around. But given how little I pay now, I can’t imagine it would be worth switching, as I would have to switch my home owners insurance too.

If they really want to know how safe you’re driving they should have a sensor to measure the distance to the car in front of you. Probably a lot more important safety metric than anything you can get of the OBD port. Unless some of these newer cars with adaptive cruise control can read that off the OBD, in which case, nevermind.

Keep in mind insurance rates are predominately based on your credit score. Your bad driving habits will cause your premium to go up, while your good driving habits will only keep your premium from increasing. I’m pretty sure this is just a gimmick.

I actually have one of these gizmos. There is no one more paranoid than me about intrusive rights (I don’t believe in drug testing unless you are a public employee) and using it I have been able to save 22% off my premium. I actually had 1 wipe out on ice and someone backed into my car while I was waiting at a stoplight and neither incident showed up on this gizmo. It is part of the contract between me and a private company and I can discontinue the usage of it at any time.

I’m curious if they count speeding, as an evasive manuever (no I wouldn’t use that as an excuse unless it was true), against you. I’m thinking of a few instances where you are turning and think you have enough time to get up to speed and look in your rearview and see somebody barreling down on you a lot faster than you figured and you start speeding up, more quickly than normal, to get out of the way.

If you really want to save money on auto insurance, adopt a pay-at-the-pump system where the cost of basic auto insurance is incorporated into the cost of fuel. If universally adopted, this system would practically eliminate the problem of uninsured drivers and would take most of the marketing costs out of the car insurance system. It would also increase the variable cost of driving while decreasing the fixed costs, so the end result would be discouraging unnecessary trips and lowering fuel consumption.
Andrew Tobias wrote a book on the subject in 1993, but the idea went nowhere. IMHO it was partially because of the fact that it would take coordinated action between the states, but the bigger problem was that the average driver thinks he is an above average driver, so he doesn’t want to subsidize the insurance of all those inferior drivers. Tobias’s timing was bad, corresponding with the beginning of the SUV boom. SUV owners didn’t want to pay more for the insurance on their “safe” vehicles, even though by driving heavy cars they actually spread more risk to other drivers.
Another problem with pay-at-the-pump is that it is a type of no-fault insurance. No-fault has its strengths and weaknesses. As a practical matter, a lot of people would probably want more coverage than would be politically feasible in a pump-based system, so they would have to supplement with first-party underinsured driver, collision and comprehensive supplements.
Despite its problems, I think the idea of pump-paid insurance deserved more consideration that it got, and it is worth a second look.

“…the average driver thinks he is an above average driver…” So I’m not the only one who has noticed the phenomenon? It seems like every time I get into a car with somebody else, everybody else on the road is a moron who needs to hand in their keys and pick up a bus pass. I’ve made the comments myself, so I’m not pointing fingers, but I find it funny.

So with your plan a very safe driver in a pickup can be effectively subsidizing a bad driver in a 1995 Geo Metro? Bad plan. The single payer version of auto insurance.

If you don’t have the ambition to shop around for the best rates (or you behave in a way that raises your rates) you deserve to pay more. While I cannot stand the “Flo” commercials there may be a market for this, and it may be a good option for safe drivers or parents with teenagers that want an electronic nanny in the car. Let the marketplace decide.

Guess who will be ultimately designing cars in the near future? Many years ago (1972), the USDOT came up with their version of a “safe” car. It looked oddly like a 1980 Crown Vic, only squarer and heavier, no style at all and a periscope for rear visibility! We’re on our way!

I have to say, I’m actually intrigued by this device. I love to drive. I love to drive quick. I have never been involved in even a fender bender. I have about the lowest possible rates I think I can have for someone my age, with my car (GTI), etc.

On one hand, I don’t like the idea that they would know some of my driving habits. Yes, I like to hit the gas hard, rip to redline sometimes. Does that affect the decision? They may think it means I’m unsafe, is that true? ABS kicking in is another. I live in Idaho. It snows a lot. You slide. ABS, stability come on frequently in winter. How does that work? I also saw an article this past weekend saying it WOULD keep track of how often a driver passes 80mph. This post says it wouldn’t. Which is correct? And even if I do hit 80mph (I usually cruise about that speed in a 70mph zone) what is the problem here? Some parts (not enough, IMHO) of America that is the speed limit. How do they know I’m not in Texas or Utah?

On the flip, if it is more accurate, then I think why not? If it saves money, plus currently they’re just guessing what type of driver I am. Oh, he’s 30, he has a GTI, he’s single, his credit score is XYZ….could all be COMPLETELY wrong. But I’m charged for fitting a profile I may not actually fit. so in some way, I could see this as actually more fair than the current system.

So I’m stuck. I’m very tempted. I could always try it and go back if I don’t like it. But there are too many questions I think. What EXACTLY do they monitor? How does this thing work, legally, if I am involved in an accident? Could save $100 a year on insurance only to find the stupid thing makes me instantly guilty in a court should something happen, and I’m on the hook for something far more expensive. Can they share the data with others? Etc.

You can find answers to nearly all of your questions on Progressive’s site here: http://www.progressive.com/auto/snapshot-common-questions.aspx . The one that you won’t find there is the reference to driving over 80 mph that you mentioned seeing in another article. If you check, I think you’ll find that was in the description of Allstate’s product named Drive Wise(SM), not about Snapshot. Progressive did take high speeds into account in an earlier field-trial version, but say they do not in the current product Snapshot. They capture speed in order to calculate deceleration (see below) which goes into their discount calculation, but speed itself does not affect the discounts.

They say their discounts take into account three things about how the vehicle is driven (they don’t know or care who is driving): 1) miles driven; 2) day and time of day driving takes place: and 3) frequency of “hard braking”, which they define as a drop in speed of 7 miles per hour or more in one second. They use the hard-braking frequency as an indicator of aggressive driving. They consider some number of hard-braking events each month to be normal, so avoiding an accident by braking hard won’t effect the rate unless that happens too frequently.